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What may have gone wrong with auto-component industry of India?

I recall writing company analysis on several auto-component companies of India that had opted for making acquisitions abroad especially in European markets. While I was apprehensive of the high leveraged deals, I was confident that this signaled the strength of Indian auto-component industry that was getting efficient over years. One such company that I closely tracked few years back was Amtek Auto. It had completed 8 acquisitions within a span of 4 years. Such aggressive acquisition it seemed was in line with increased interest of global automobile manufacturer who were turning to Indian auto-component companies for better and low cost supplies. ANG Auto was other such company that undertook significant consolidation of its operations and was bagging contracts from large automobile manufacturers both from domestic as well as from international markets. Acquiring companies in European markets was coming at much lower valuations since most of them were turning red with automobile manufacturers shifting their sourcing base to Asian countries. While it seemed ideally right the current financial crisis followed by economic recession may have just hit such companies hard. Was the onset of financial crisis made such acquisitions cheaper in the first place? I leave this for researchers to study empirically.

The upturn especially for the export led companies may not be in site for next 4 quarters. This is when the leverage has its negative effect, impacting cash flows and net worth of companies simultaneously.

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